For the best part of 2011, speculation on the future of Canadian interest rates were dominated by predictions of rate hikes to come before the end of 2011. Many of the banks’ own economists were citing increasing household debt, decreasing affordability in parts of the Canadian housing market and a need to eradicate inflationary fears as contributory factors which would fuel the inevitable rise.  However, the continued stagnation of the US economy, further lamented by its S&P downgrade and increasingly frequent mutterings of the, dare not say it aloud, “double dip” have represented somewhat of a game changer for all concerned. With the US Federal Reserve now signalling its intent to keep its key interest rate near zero through to the middle of 2013 and inflationary worries subsiding on home shores, the Bank of Canada (BoC) looks increasingly likely to keep interest rates fixed at current levels until at least the second quarter of 2012. Continue reading →